Goods and Services Tax

In yet another judgment from Appellate Authority to Advance Ruling of Karnataka it has been established that the employee cost borne by the head office for rendering of services to the branches in other states shall be a taxable supply. For instance A company registered under GST has corporate office in Delhi and branch in Chandigarh. In such a case the employee cost borne by the head office at Delhi for assistance to Chandigarh shall be treated as supply chargeable to GST. The authority held that two units which are separately registered shall be distinct person in terms of section 25(4) of the Central GST Act 2017. It further held that employee working in one unit shall be treated as an employee for that particular unit for the purposes of employer-employee exemption under Schedule III of the Act. In our above example the employee who is working for Delhi unit shall be treated as employee of Delhi Unit and not of Chandigarh for claiming exemption. The authority ruled out ...